How Much Does a Tax Accountant Cost? See Real Prices & What Affects Them
Trying to figure out how much a tax accountant costs? You’re not alone. During tax season, many people find themselves overwhelmed by IRS forms, deductions, and the hassle of filing accurate returns. Whether you're an individual filing a simple tax return or a small business owner with more complex needs, understanding the average cost of tax preparation can be confusing.
At AY Miller, we aim to make tax preparation easier to understand and less stressful. In this guide, we’ll break down the average tax preparation cost, what affects the price, and how to choose the right tax accountant within your budget.
What Is the Average Cost of Tax Preparation?
If you're wondering how much tax preparation costs, the short answer is: it depends. The average tax preparation fees vary based on factors such as income level, complexity of your tax return, and whether you work with a CPA or a tax preparer.
The average cost for a basic Form 1040 with no itemized deductions is about $220.
If you itemize deductions on Schedule A (for example, mortgage interest, property tax, or medical expenses), the average cost jumps to around $323.
Business tax preparation fees (including Schedule C) can start from $400 and go well above $1,000 depending on the complexity.
These numbers provide a general baseline, but as you’ll see below, there are several variables that can affect the cost of tax preparation.
Factors That Affect the Cost of Tax Preparation
Understanding the factors that affect the cost of hiring a tax professional can help you plan better and avoid surprise fees.
Type of Tax Return
Personal tax returns with a W-2 and no dependents tend to be less expensive.
Small business or self-employed filings (with income from a side gig or freelance work) often increase the price due to added forms.
Corporate tax returns and business tax returns take more time and tax planning, making them more costly.
Complexity of Your Tax Situation
The greater the complexity of your tax return, the more work it takes to prepare:
Own rental property? Expect to add Schedule E.
Invested in cryptocurrency or stocks? Capital gains reporting adds time.
Have multiple income sources? More time = more cost.
Type of Tax Professional
A Certified Public Accountant (CPA) can charge more due to their licensing and expertise.
A tax preparer without CPA certification may charge lower tax preparation fees, but may not provide tax planning advice or represent you during an IRS audit.
A tax advisor typically offers more strategic planning but could cost more depending on services.
Pricing Model
CPAs and tax preparers typically charge using one of the following models:
Flat fee: Many offer set pricing for types of returns. Simple 1040s may cost less than $200.
Per hour: Others charge by the hour. Rates can range from $100 to $400 per hour, depending on the experience of the tax professional.
Per form: Some pros charge based on the number and type of forms involved.
Location and Cost of Living
The cost of living in your area also impacts how much accountants typically charge. In urban areas like Denver, Colorado, expect to pay slightly more for tax services than in rural areas.
Experience and Credentials
An experienced CPA or professional tax preparer who knows current tax law may charge more, but their expertise could save you time, reduce your tax liability, or even help avoid IRS penalties.
What Is the Cost of Tax Preparation for Businesses?
When it comes to business tax, there’s simply more complexity. Business owners must deal with:
Payroll records
Bookkeeping details
Inventory tracking
IRS tax forms associated with corporations, partnerships, and LLCs
The overall cost of filing a business tax return depends on business size and structure:
Sole proprietorships or freelancers with Schedule C: $400 - $800+
LLCs with employees: $750 - $2,000
Corporations filing corporate tax (Form 1120): $1,000 - $5,000
If your small business is also navigating depreciation, investments, or regulatory compliance, expect higher tax preparation rates.
Tax Preparation by CPA vs. Tax Preparer: Which Should You Choose?
So what’s better—CPA tax preparation or using a standard tax preparer?
CPA (Certified Public Accountant)
Pros:
Licensed and regulated
Can represent you before the IRS
Offers full-service tax planning, audits, and finance consulting
Cons:
Higher cost to hire
May charge per hour or use a premium flat fee
Tax Preparer
Pros:
Often less expensive
A frequent option for basic tax filing
Cons:
Limited representation rights if audited
May miss strategic tax deduction opportunities
For more complex needs like corporate tax, investments, or tax avoidance strategies, it’s usually worth it to work with a CPA. If your situation is straightforward and you just need to file your tax return, a standard tax pro may suffice.
What’s the Average Cost for a Basic Tax Return?
If you're only looking to file taxes on a simple tax return, the average cost is much lower. Let’s compare:
This average tax preparation data reflects standard pricing in the United States, but your cost of tax preparation could vary within Denver, based on your provider.
How to Choose the Right Tax Accountant in Denver
Choosing the right professional starts by evaluating your specific tax situation. Here’s how to choose the right tax accountant:
Assess your needs: A basic tax filing doesn’t require advanced tax planning or a CPA.
Ask about pricing: Clarify whether they charge a flat rate or per hour.
Verify credentials: Look for CPA certification or professional tax preparer registration with the IRS.
Look at experience: Especially important for business owner needs or complex tax situations.
Consider communication style: You want someone who answers your questions clearly and promptly.
Looking for a trusted and approachable tax accountant in Denver? Consider working with AY Miller’s tax team for individualized service without confusing language or hidden fees.
How Much Does It Usually Cost to File Taxes Online?
If your return is straightforward, you might opt for online tax software like TurboTax. These tools allow a do-it-yourself approach, with pricing that typically varies:
Free for basic filings with W-2 income
$50 - $120 for returns that include itemized deductions or self-employment income
$150+ with live tax advisor assistance
While online tools can cost as little as $0, be cautious if your situation involves individual tax returns with itemized deductions or rental income. Here, the cost to get an expert review may be worth it.
When Should You Hire a Tax Professional?
Hiring a tax accountant makes sense if:
You're self-employed or own a small business
You’ve sold property or stocks (handling capital gain taxes)
You’re saving for retirement and want smart advice
You’re adopting or have other specific tax circumstances
You want to reduce IRS risk with compliant audit preparation
A professional can streamline your tax filing, stay on top of tax regulation, and help you maximize your tax savings opportunities.
Is Hiring a Tax Accountant Worth the Money?
Consider not only the upfront cost but also the bigger picture:
Are you overpaying income tax?
Are you claiming every tax deduction you’re eligible for?
Do you worry about IRS penalties or an income tax audit?
The cost to file using a professional tax expert often pays off in peace of mind, accuracy, and a stronger financial footing—especially during tax season.
Final Thoughts: Find a Tax Accountant Within Your Budget
So, how much does a tax accountant cost? For individuals, expect $220–$500. For small business owners or those requiring complex filings, it could be $800 or more. The price of tax preparation depends on your circumstances, but finding the right professional can reduce stress, improve accuracy, and pay off in savings.
To recap:
Understand your type of tax needs and tax return complexity
Decide between CPA vs. tax preparer based on services and cost
Get clear on fees—whether flat fee, per hour, or form-based
Choose someone approachable, experienced, and local to your area
Ready to simplify your filing and get reliable results? Get in touch with a trusted tax accountant in Denver today.
